Indian Steel Industry Faces Low Demand And Declining Prices In Week 4 Of May 2023

During week 4 (20 May 2023 to 27 May 2023) the Indian domestic Steel industry noticed poor response from the market due to low demand and continuous declining prices. So far in May 2023, for some segments, the sentiments remained steady with few minor changes as raw material supply and lengthening delivery time were the major concerns. The domestic Finished Steel market was affected drastically due to China’s lower offers in the international market and dull global sentiments, Ofbusiness learned. Let’s understand the Indian Steel industry’s movement during the month and what lies ahead:

Product Wise Market Sentiments

• Semi-Finished– The domestic Semi-Finished Steel market in India has experienced a significant downfall during the week. Finished Steel mills are encountering low inquiries and a dull response from end consumers, further impacting Semi-Finished Steel price movement. In response to weak sentiments and uncertain scenarios, Billets and Sponge Iron sellers have been forced to reduce their offers, resulting in price plunges of Rs. 200-800/ton WoW.

• Rebar- TMT makers are going through numerous challenges due to sluggish demand and a subsequent price decline. The primary and secondary rolling mills are worried about increasing inventory concern, resulting in downward pressure on prices. Limited inquiries from infrastructure and construction further contributed to buyer caution, impacting market sentiments. Distributors are adopting a conservative approach while rolling mills prioritize production capacity to avoid supply-demand mismatches.

• Structural Steel– The domestic Structural Steel market has experienced a sluggish trend across various regions, leading to hesitancy among buyers in booking bulk materials. The sluggish trend created an atmosphere where market participants hope for price reductions, while mills’ offers remain stagnant. However, attractive discounts are being offered by distributors and traders to entice end consumers and clear existing stock.

• Flat Steel– The Indian HRC and CRC market remained poor and suppliers were on the lookout for buyers both domestically and in export markets. In the mid of May 2023, the domestic HRC and CRC prices fell approximately up to Rs. 2,000-2,500/ton from last month, to Rs. 57,500/ton and Rs. 63,500/ton, respectively, in the Mumbai market. This price reduction illustrates how providers are responding to the inflow of low-cost imports and the current situation of the Indian HRC market.

• Pipe– The Indian Pipe industry stood stagnant throughout May 2023, whereas the demand remained firm. Manufacturers are facing delivery issues in some Pipe segments due to the rising raw material supply concerns. 

Prices

• Primary TMT- The primary mills were operating at:
  • Rs. 55,000-55,500/ton- ex Mumbai
  • Rs. 55,000-55,500/ton ex Delhi
  • Rs. 53,000-53,500/ton ex Vizag
• Secondary TMT- The current offers for mid-sized mill’s TMT stands at around:
  • Rs. 48,300/ton ex Raipur
  • Rs. 52,100/ton ex Delhi NCR
  • Rs. 52,000/ton ex Hyderabad 

• Primary Structure- Primary Structure offers stand at:
  • Rs. 55,000/ton ex Durgapur
  • Rs. 58,500/ton ex Chennai
  • Rs. 57,000/ton ex Hyderabad
• Secondary Structure- Secondary mill remains at
  • Rs. 52,000/ton ex Raipur
  • Rs. 51,500/ton ex Raigarh
  • Rs. 54,000/ton ex Chennai
  • Rs. 53,200/ton ex Hyderabad

• Ductile Iron Pipe- Despite the consistent prices, there is pressure for Ductile Iron Pipe prices to decrease. 100mm K7 DI Pipes are offered for between Rs. 1200-1220/meter FOR within the radius of 800 km, a correction of Rs. 40/meter was noticed compared to April 2023.
• MS ERW Pipes- The primary and secondary MS ERW Pipe and MS GI Pipe (YST-210 grade) noticed a downfall of Rs. 1-1.5/kg MoM to around Rs. 66-67/kg and 62-63/kg, respectively.

OFB’s insight

The Indian Steel market is going through a very bad phase with uncertainty hovering around. As a result, the Indian Steel industry faced challenging conditions during week 4 of May 2023, marked by low demand and declining prices. The overall Steel market remained under pressure. Market participants are expecting further price correction in the next month. Hence traders and distributors are eyeing primary mills’ price revision announcement.

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